Petrobras Tops Q3 Earnings Estimates Despite Price Pressure

Petroleo Brasileiro S.A., or Petrobras PBR, announced third-quarter earnings per ADS of 82 cents, beating the Zacks Consensus Estimate of 79 cents. The outperformance can be attributed to strong production growth. However, the bottom line deteriorated from the year-ago profit of 93 cents due to a decline in realized oil prices and elevated lifting costs.Consolidated net income, which strips out one-time items, came in at $5,235 million compared with $5,474 million a year earlier. Petrobras’ adjusted EBITDA edged up to $11,728 million from $11,480 million a year ago.Brazil's state-run energy giant reported revenues of $23,477 million, which edged up 0.5% from the year-earlier sales of $23,366 million but missed the Zacks Consensus Estimate of $23,715 million. Along with the third-quarter earnings announcement, PBR added that it plans to shell out RMB 12.2 billion in dividends and equity interests.Petroleo Brasileiro S.A.- Petrobras Price, Consensus and EPS Surprise Petroleo Brasileiro S.A.- Petrobras price-consensus-eps-surprise-chart | Petroleo Brasileiro S.A.- Petrobras QuoteComing back to earnings, let's take a deeper look at the recent performances of PBR’s two main segments: Upstream (Exploration & Production) and Downstream (or Refining, Transportation and Marketing).Upstream: The Rio de Janeiro-headquartered company’s average oil and gas production during the third quarter reached 3,144 thousand barrels of oil equivalent per day (MBOE/d) — 80% liquids — compared to 2,689 MBOE/d in the same period of 2024.Brazilian oil and natural gas production — constituting approximately 99% of the total output — improved 17.3% to 3,114 MBOE/d.In the July to September period, the average sales price of oil (or the average Brent crude price) fell nearly 14% year over year to $69.07 per barrel. The decrease in crude prices was more than offset by the rise in production, thereby having a positive effect on upstream unit sales. Overall, the segment’s revenues improved to $15,737 million in the quarter under review from $15,383 million in the year-ago period. As far as the bottom line is concerned, it was dented by an uptick in pre-salt lifting costs (which jumped 13.3% from the year-ago period to $6.91 per barrel). Consequently, the upstream unit recorded a net income of $5,168 million, down 4.6% from third-quarter 2024 earnings of $5,416 million. Downstream (or Refining, Transportation and Marketing): Revenues from the segment totaled $22,083 million, 1.6% higher than the year-ago figure of $21,739 million, due to higher domestic sales volumes. Petrobras' downstream unit recorded a profit of $583 million, which rose sharply from earnings of $255 million in the third quarter of 2024. Apart from an increase in revenues, the unit’s income was buoyed by lower operating costs.CostsDuring the period, Petrobras’ sales, general and administrative expenses were $1,861 million, 16.2% higher than the year-ago quarter. Selling expenses rose from $1,193 million a year ago to $1,360 million. However, a significant reduction in other expenses and exploration costs, to go with an impairment reversal, led to a 10.1% decrease in total operating expenses.Meanwhile, a 7.9% uptick in cost of sales led to a drop in PBR’s operating income to $7,976 million in the third quarter of 2025 compared with $8,400 million a year ago.Financial PositionDuring the three months ended Sept. 30, 2025, Petrobras’ capital investments and expenditures totaled $5,510 million compared with $4,454 million (including signature bonus) in the prior-year quarter.Importantly, the Zacks Rank #3 (Hold) company generated a positive free cash flow for the 42nd consecutive quarter, with the metric coming in at 4,967 million. However, it fell from $6,857 million recorded in last year’s corresponding period.You can see the complete list of today’s Zacks #1 Rank stocks here.At the end of the third quarter, Petrobras had a net debt of $59,053 million, up from $44,251 million a year ago and $58,563 million as of June 30, 2025. The company ended the quarter with cash and cash equivalents of $8,964 million.Petrobras’ net debt to trailing 12-month EBITDA ratio deteriorated to 1.53 from 0.95 in the previous year. It was 1.53 at the end of the previous quarter, too.Some Key Energy EarningsWhile we have discussed PBR’s third-quarter results in detail, let’s see how some other energy companies have fared this earnings season.Europe’s largest oil company, Shell plc SHEL, reported third-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.86, which came in above the Zacks Consensus Estimate of $1.72 on the back of cost reductions and robust oil volumes. However, the bottom line fell from the year-ago adjusted profit of $1.92 due to a decline in oil prices.Shell’s revenues of $70.4 billion were down from $72.5 billion in third-quarter 2024 and missed the consensus mark by 5.9%. Meanwhile, Shell repurchased $3.6 billion in shares in the third quarter. The London-based company expects another $3.5 billion worth of repurchases for the fourth quarter.Motor fuel retailer Murphy USA MUSA announced third-quarter 2025 adjusted earnings per share of $7.25, which beat the Zacks Consensus Estimate of $6.60 and compared favorably with the year-ago profit of $7.20. The outperformance was primarily on the back of higher merchandise results. However, Murphy USA’s operating revenues of $5.1 billion fell 2.5% year over year and missed the consensus mark by $104 million due to lower-than-expected petroleum product sales. As of Sept. 30, Murphy USA — which opened eight new retail locations in the quarter and closed two outlets to take its store count to 1,772 — had cash and cash equivalents of $42.8 million and long-term debt (including lease obligations) of $2.2 billion, with a debt-to-capitalization of 80.3%. During the quarter, MUSA bought back shares worth $221.4 million.U.S. energy operator APA Corporation APA reported third-quarter 2025 adjusted earnings of 93 cents per share, beating the Zacks Consensus Estimate of 74 cents. The outperformance primarily reflects higher-than-expected production and lower costs. APA’s bottom line fell from the year-ago adjusted profit of $1.00 due to lower oil realizations. Revenues of $2 billion were down 20.6% from the year-ago quarter’s sales and lagged the Zacks Consensus Estimate by 1.3%.During the quarter under review, APA generated $1.5 billion of cash from operating activities while it incurred $542 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1.2 billion. It also registered a free cash flow of $339 million compared to $219 million a year ago. As of Sept. 30, APA had approximately $475 million in cash and cash equivalents and $4.3 billion in long-term debt, representing a debt-to-capitalization of 41.7%.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Petroleo Brasileiro S.A.- Petrobras (PBR): Free Stock Analysis Report APA Corporation (APA): Free Stock Analysis Report Murphy USA Inc. (MUSA): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks